School loans eligible to be discharged in bankruptcy?

[s0me0nesmind1]

Aren't we the only country that puts our students in so much debt?

Is there another country that profits off our students like America? I don't think so.

IMO, the whole thing needs restructuring. All the way from how these loans are distributed to high cost of college. If not, we are in for some massive pain. You can't get blood from a stone, and the longer college educated people have to hold onto their loans the harder it will be for them to contribute to our society. In the end the taxpayers will have to pick up the tab. Sooner or later...

Yes, yes we are.

So stop giving out such huge loans for dumb fucks to go to private and/or out of state colleges. If you want to go to college on someone else's dime, god forbid you have some rules/restrictions in place.

Or just simply put a cap of - say - $20-40k total. If you go over that, I hope you have a job while working - and if that's not enough for you. Well, I guess you will have to do something else in life.

Or kill the student loans altogether. Attendance will plummet. Schools will have to cut programs (*cough* Liberal Arts *cough*), and people will go back to trade schools and other useful skills that aren't $80k loans. All the while, they would have to drop the cost of attendance in order to compensate and get attendance up.

 

[Mai72]

Yes, yes we are.

So stop giving out such huge loans for dumb fucks to go to private and/or out of state colleges. If you want to go to college on someone else's dime, god forbid you have some rules/restrictions in place.

Or just simply put a cap of - say - $20-40k total. If you go over that, I hope you have a job while working - and if that's not enough for you. Well, I guess you will have to do something else in life.

Or kill the student loans altogether. Attendance will plummet. Schools will have to cut programs (*cough* Liberal Arts *cough*), and people will go back to trade schools and other useful skills that aren't $80k loans. All the while, they would have to drop the cost of attendance in order to compensate and get attendance up.

IMO this is where we are headed.

We can't expect this to last indefinitely. There has got to be a limit and it's going to hit us like a ton of bricks. We will have to come up with solutions to the problem like putting a limit on what you can take out when you're in college.

 

[poofyhairguy]

The second biggest holders of student loan debt are people over 40.

Sure, but a lot of that generation were raised to pay off of a debt that you took out. Personal responsibility and all.

Many millennials I know acted like the loan was free money, and they get pissed when they have this huge note to float via their crappy entry level job. Eventually the entitlement will overcome what is right and wrong and the loans will be a political football.

I expect copyright to basically die within a generation or two for the same reason. Selfishness mixed with entitlement and politics.

 

[Brainonska511]

I expect copyright to basically die within a generation or two for the same reason. Selfishness mixed with entitlement and politics.

That's hardly a problem of the millennial generation. Plenty of the older crowd are more than happy to take their cut and pull the ladder up behind them.

For example, just look at some of the posts on this forum: screaming about the loss of jobs to China, yet people will be more than happy to search the web to buy crap online, straight from China instead of a local, non-chain business (the latest one I can think of is eyeglasses). Or shopping online and then complaining about having to pay sales taxes. Or searching for streams of TV shows that they don't want to pay for.

 

[purbeast0]

just what today's youth needs - more ways to make them feel entitled.

don't feel like paying your student loan back?

WELL GOOD, FUCK THEM DONT PAY THEM BACK!

 

[Belegost]

The second biggest holders of student loan debt are people over 40. They went back to school after the '07 crisis so they could develop a larger skill set to compete in this new marketplace. In the mean time they took out massive student loans with the thought that they would be able to pay it back when they got a better job. The problem was the job market didn't go as planned and many people were left with a college degree and no job.

I'm not making an excuse or putting the blame on anyone. Just stating facts.

Stating facts?

How about the fact that bachelor and higher degree holders have a 75% employment participation rate, with less than 3% unemployment currently? Compare that with 57% participation and 5.8% unemployment for high school only.

Or the fact that college grads have a 40% higher median income than high school only workers.

Are there people who graduated and failed to find a job, or found one with a much lower than expected income? Certainly.

Are they representative of college degree holders in general? Don't see how given the current reported information. The story about droves of unemployed college grads doesn't fit with the numbers.

 

[ultimatebob]

Yes, yes we are.

So stop giving out such huge loans for dumb fucks to go to private and/or out of state colleges. If you want to go to college on someone else's dime, god forbid you have some rules/restrictions in place.

Or just simply put a cap of - say - $20-40k total. If you go over that, I hope you have a job while working - and if that's not enough for you. Well, I guess you will have to do something else in life.

Or kill the student loans altogether. Attendance will plummet. Schools will have to cut programs (*cough* Liberal Arts *cough*), and people will go back to trade schools and other useful skills that aren't $80k loans. All the while, they would have to drop the cost of attendance in order to compensate and get attendance up.

Ya know, I'm OK with that. I'm sure the organizations offering the student loans have statistics on what schools and what degrees have the best chances of paying back the loan in full. Use that information to make better choices on who you lend money to.

If someone wants to go to Phoenix Online to get a useless degree like French Poetry, they should be allowed to deny that loan and make that student figure out a different way of paying for it.

 

[glenn1]

Make it so that if someone defaults on a student loan the outstanding balance reverts to the college they attended. Hell, I'd even being up for making college administrators personally liable for part of the bad debt their students create.

 

[TwiceOver]

Why bother. Just stop paying them. I hear that's the *thing* to do these days and you have every right to not pay back the money you promised since you were swindled by the evil greedy bankers.

http://www.nytimes.com/2015/06/07/opinion/sunday/why-i-defaulted-on-my-student-loans.html

 

[Brainonska511]

If you want to get angry, read this person's ridiculous op-ed on why they chose to default: http://nyti.ms/1IsIxIU

He has 2 degrees from Columbia (BA and MA), author of 4 books, etc... with a seemingly successful career, coupled with the likely lower amount he would have had to borrow when he obtained his degrees compared to today, yet chooses to be a deadbeat.

Why bother. Just stop paying them. I hear that's the *thing* to do these days and you have every right to not pay back the money you promised since you were swindled by the evil greedy bankers.

http://www.nytimes.com/2015/06/07/opinion/sunday/why-i-defaulted-on-my-student-loans.html

Way ahead of you there with the link to piss everyone off.

But screw that guy. Considering his age (born in 1957), he likely got his degrees when stuff was much cheaper.

 

[TwiceOver]

Way ahead of you there with the link to piss everyone off.

But screw that guy. Considering his age (born in 1957), he likely got his degrees when stuff was much cheaper.

Sorry, didn't see the tiny URL.

I would think that at some point during that guy's multi year multi masters degree education he would have thought "Wait, there's no way I can pay all this back".

 

[SunnyD]

Or kill the student loans altogether. Attendance will plummet. Schools will have to cut programs (*cough* Liberal Arts *cough*), and people will go back to trade schools and other useful skills that aren't $80k loans. All the while, they would have to drop the cost of attendance in order to compensate and get attendance up.

No they won't. Private lenders will step in to fill the gap and the government will step in when those "too big to fail" private lenders start eating the defaults themselves.

 

[BoomerD]

If it becomes easier to avoid student loan debt via bankruptcy, I expect to see the availability of student loans dry up...and the ones that remain will become MUCH more difficult to qualify for.

 

[NoTine42]

Make it so that if someone defaults on a student loan the outstanding balance reverts to the college they attended. Hell, I'd even being up for making college administrators personally liable for part of the bad debt their students create.

And your university can't offer any low interest government loans if you charge more than $200/semester for books.

 

[BUTCH1]

He's a full-fledged asshole IMO. He's got a master's from Columbia, (one of the pricier schools around) and a BA and now he feels like an "undue burden" is placed upon his shoulders?, go fuck yourself dick-head, I wish I had the training for a $100K/year job for FREE so I could afford a bigger house and a boat, fucking LOSER is what he is.

 

[Ayrahvon]

Not only do I have a BA in Anthropology, I have a Masters as well. I'm also employed. I also think my friend (however naive he may have been) who went to George Washington Law and then dropped out during year two, should have a huge chunk of his debt forgiven. Let's just have people pay upon completion, then we can call it what it is. Buying your degree.

 

[halik]

The reason I had to pay 6.8% on the 40K of grad school loans when interest rates were 0% are entitled dipshits like him.

DOE does have hardship clause to discharge loans and this is used for actual hardship ( eg an MD graduate that gets into a car wreck and suffers traumatic brain injury), not some columbia dickwad that wants to "choose life".

 

[highland145]

Not only do I have a BA in Anthropology, I have a Masters as well. I'm also employed. I also think my friend (however naive he may have been) who went to George Washington Law and then dropped out during year two, should have a huge chunk of his debt forgiven. Let's just have people pay upon completion, then we can call it what it is. Buying your degree.

B.S.

 

[NoTine42]

Smart students don't get student loans
https://college.harvard.edu/financial-aid/types-aid/loans

You are not expected to take out loans as part of your financial aid package. Our aid packages are designed to cover your financial need without additional borrowing. In fact, most of our students graduate debt-free.

https://admission.princeton.edu/financialaid

No Loans: In 2001, Princeton became the first university to offer every aid recipient a financial aid package that replaces loans with grant aid that students do not pay back.

 

[Tobolo]

I totally would take that with a grain of salt. Considering it is a FEDERAL loan, I'm not sure how or why a state court would do anything concerning it.

If you're depending on a court to get rid of your student loans (while you shoot your credit down the toilet), your gonna have a bad time.

FWIW Bankruptcy is done through a US court, not a state court.

 

[Sonikku]

1.Pay off student loan with credit card.
2.Covert government debt to private debt.
3.Declare bankruptcy.

 

[LegendKiller]

1.Pay off student loan with credit card.
2.Covert government debt to private debt.
3.Declare bankruptcy.

FYI - *ALL* student loan debt is non-dischargable (except in extreme hardship which is way less than 5%).


So let's see what can go wrong with your scenario...


https://www.law.cornell.edu/uscode/text/11/523

(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by—
(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition;
(B) use of a statement in writing—
(i) that is materially false;
(ii) respecting the debtor’s or an insider’s financial condition;
(iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and
(iv) that the debtor caused to be made or published with intent to deceive; or
(C)
(i) for purposes of subparagraph (A)—
(I) consumer debts owed to a single creditor and aggregating more than $500 for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and
(II) cash advances aggregating more than $750 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable; and

So you are committing fraud, obtaining a cash advance (assuming <70 day filing). So no go there.

Here is the section on student loans

(B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual;

Going to the IRS code from 1986

For purposes of this section—
(1) Qualified education loan
The term “qualified education loan” means any indebtedness incurred by the taxpayer solely to pay qualified higher education expenses—
(A)which are incurred on behalf of the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer as of the time the indebtedness was incurred,
(B)which are paid or incurred within a reasonable period of time before or after the indebtedness is incurred, and
(C)which are attributable to education furnished during a period during which the recipient was an eligible student.
Such term includes indebtedness used to refinance indebtedness which qualifies as a qualified education loan. The term “qualified education loan” shall not include any indebtedness owed to a person who is related (within the meaning of section 267(b) or 707(b)(1)) to the taxpayer or to any person by reason of a loan under any qualified employer plan (as defined in section 72(p)(4)) or under any contract referred to in section 72(p)(5).

Now you run into the problem that your new CC debt *could* be considered a refinancing, and thus not dischargable.

It's a dumb fucking idea to screw with bankruptcy judges. The *last* thing you want to do is take your 6.8% interest rate loan, pay it off using a cash advance at 20%, and then dry to discharge. Now you're paying 4k/yr in just interest on a 20k student loan, rather than just 1.3k/yr.

Good luck with that.

 

[zinfamous]

gov't should forgive all student loan debts.

what's the worse that can happen?

Government forgave the crimes and many trillions of dollars stolen by a relative handful of uneducated assholes on Wallstreet...so what's the issue with helping out a relatively better-educated population, that aren't costing the American people nearly as much money?

 

[LegendKiller]

If it becomes easier to avoid student loan debt via bankruptcy, I expect to see the availability of student loans dry up...and the ones that remain will become MUCH more difficult to qualify for.

Private student loans existed well before bankruptcy dischargability was eliminated for privates and they will exist after. Part of it will be co-signers, the other part will have to be tuition reduction. If the government doesn't take up the slack enrollment will drop, school will get cheaper.

 

[LegendKiller]

Government forgave the crimes and many trillions of dollars stolen by a relative handful of uneducated assholes on Wallstreet...so what's the issue with helping out a relatively better-educated population, that aren't costing the American people nearly as much money?

Please find me where "trillions" were stolen by Wall St. I'll be interested in seeing proof.